LPL Financial Holdings Inc. has entered into an agreement with Macquarie Asset Management to acquire the wealth management business of Waddell & Reed Financial, Inc.
The transaction—LPL will pay $300 million (with estimated onboarding and integration costs of $85 million over the 12 months following the close)—is to take place upon completion of Macquarie’s acquisition of all of the issued and outstanding common shares of Waddell & Reed (for $25.00 per share in cash representing total consideration of $1.7 billion). Additionally, LPL and Macquarie have agreed to enter into a long-term partnership, with Macquarie becoming one of LPL’s top tier strategic asset management partners.
Waddell & Reed has some 900 financial advisors, and about $63 billion in assets under advisement (about 45% of that advisory), with an average of approximately $70 million of client assets per advisor as of Sept. 30, according to LPL.
The transaction has been approved by the Boards of Directors of LPL Financial, Macquarie Group and Waddell & Reed, and is expected to close in the middle of 2021, subject to regulatory approvals, Waddell & Reed stockholder approval, and “other customary closing conditions.”
As a result of the transaction, Macquarie Asset Management’s assets under management are expected to increase to over $465 billion, with the combined business becoming a top 251 actively managed, long-term, open-ended U.S. mutual fund manager by assets under management, according to the firm.
